Peter Norris Lecture

Peter began the session off by explaining that he will use today’s time by splitting the lecture into two so that it gives time people to ask questions about their market report. Therefore not as much information was covered in today’s lecture, however, I personally would have preferred a drop in for the entire session so I didn’t feel rushed when asking him questions.

What is an inelastic demand? 

A situation in which the demand for a product does not increase or decrease correspondingly with a fall or rise in its price. From the supplier’s viewpoint, this is a highly desirable situation because price and total revenue are directly related; an increase in price increases total revenue despite a fall in the quantity demanded. An example of a product with inelastic demand is gasoline.

What is an Elastic demand? 

A demand that increases or decreases as the price of an item goes down or up.

Taxes

Taxes are kinds of fees or charges that the government require people to pay in order to live and work in their state or country. The government needs money to operate, and taxes are a way for it to get this money. This money goes to fund many different types of programs.  It may be used to fix roads and bridges.  It may be used to pay for the military.  Is is also used to help our education, supposedly.

There are different kinds of taxes.  Grown-ups and teenagers that have jobs pay taxes on the money that they earn from working.  You usually have sales tax that you pay when you buy something, like a toy or a game, in a shop.

Firms

For the second part of lecture Peter spoke about firms, this linked better to our course as it involved setting up a business and he often used a design firm as an example. Originally, trading was very much relied upon, however, now, even though trading is still used there are other ways of dealing with it.

Sole Trader

Registering as a sole trader in the most straightforward way to set up a one man business. You are effectively forming a singular company with a single liability and shareholder. You can trade under any name- your own, brand, or pseudonym as long as you don;t add “limited” at the end. Filing the accounts for a sole trader is simpler and you have maximum control over your earnings, but you can potentially find yourself paying higher taxes than other businesses and are personally responsible for any debt which can be a big draw back. For sole traders, tight control of cash flow is key to success.

Partnership  

Often, a sole trader will result in a partnership. In the UK, a limited partnership means two or more people in which can form the company, therefore they must all have common interests and intentions. You can also team up with more people and invest in a limited partnership as limited partners and then avoid any obligations to debt.

Limited Company

The most common means of setting up a business, in essence this means you’ll potentially pay less tax and limits the amount of money you stand to lose; plus- some clients only work with limited companies. You will need to complete paperwork, comply with legislation and pay yourself and staff a set salary. Beware the implications of shareholders- especially if forming a company with more than one founder. Rights to trading names and directorships must be agreed before starting.

I found the later stage of the session more helpful as you need to know this information if you intend on setting up your own business. Perhaps, some day I might; therefore it is worth becoming familiar with this world now.

 

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